Lawmakers push bill preventing multiple taxes on goods sold online

After
being foiled once before and going back to the drawing board, a
bipartisan group of lawmakers in the House and the Senate are pushing a
revised bill to prevent multiple taxes on goods and services sold over
the Internet.

The
bill, called the “Digital Goods and Services Tax Fairness Act of 2013,”
would prohibit multiple levels of taxation on digital goods and
services like music, pictures, and movies. Proponents say it would
ensure that people are not penalized for buying such goods online
instead of buying tangible versions of those goods at a brick-and-mortar
shop.

The
legislation was introduced by Reps. Lamar Smith, R-Texas, and Steve
Cohen, D-Tenn., in the House in December. A similar bill was introduced
in the Senate by Sens. Ron Wyden, D-Ore., and John Thune, R-S.D.

“As
technology advances, it is important that tax policies do not unfairly
penalize consumers who choose to download digital goods rather than
purchase their tangible counterparts,” explained Smith in a statement.
“This legislation promotes tax fairness and ensures that consumers are
not discouraged from purchasing digital goods.”

“Digital goods and
services are quickly becoming a driving force in our national economy,”
added Cohen. “We need to establish a uniform framework for the taxation
of digital goods and services so consumers won’t be double-taxed.”

An earlier version of the
bill drew opposition from the National Governors Association, which
called for a more stringent definition of digital goods and adjustments
to ensure that states would not lose too much revenue from the
limitations on taxation, according to Bloomberg News.

Some
governors also took issue with a provision in the original bill that
would have barred states from shaping internet sales taxes via
administrative or regulatory means, forcing them to use the legislative
process instead. The revised bill dropped that particular provision, Sam
Whitehorn, the executive director of the Download Fairness Coalition,
told Bloomberg.

The
revised bill is not the first time this Congress has considered a
measure dealing with taxation of goods sold over the Internet. In May,
the Senate passed the Marketplace Fairness Act, which would give
state governments the ability to collect Internet sales taxes from
businesses headquartered outside of their respective state borders.

That bill was pushed by
brick-and-mortar retailers who feared that out-of-state online
competitors were enjoying an unfair advantage by neglecting to collect
the sales tax owed on the products they sell. The legislation is
currently pending before the House Judiciary Committee.